Page 1
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
1
ANNOUNCEMENT
The Board of Directors of AirAsia Group Berhad (“AirAsia” or “the Company”) is pleased to announce the
following unaudited consolidated results of AirAsia Group and its subsidiaries (collectively known as “the
Group”) for the first quarter ended 31 March 2019.
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT
**share of results of associates is disclosed above the EBITDA line to facilitate disclosure of Airline performance. The performance of the
associates are disclosed in Note 30.
The Condensed Income Statement in compliance with MFRS 134 is as disclosed in Note 1.
31/3/2019 31/3/2018 31/3/2019 31/3/2018
Note RM'000 RM'000 RM'000 RM'000
Revenue 11 2,780,136 2,555,182 2,780,136 2,555,182
Operating expenses:
- Staff costs (428,204) (371,152) (428,204) (371,152)
- Aircraft fuel expenses (956,664) (852,457) (956,664) (852,457)
- Maintenance and overhaul (279,500) (170,590) (279,500) (170,590)
- User charges and other related expenses (419,520) (357,003) (419,520) (357,003)
- Aircraft operating lease expenses - (200,225) - (200,225)
- Other operating expenses (129,747) (136,159) (129,747) (136,159)
Other income 12 80,879 119,754 80,879 119,754
Share of results of associates ** 31,053 55,502 31,053 55,502
Airline EBITDA 678,433 642,852 678,433 642,852
Non Airline EBITDA
- Teleport (Logistics) 30 51,805 - 51,805 -
- AirAsia.com 30 557 (613) 557 (613)
- Red Beat Ventures Group ("RBV Group") 30 (13,422) (5,897) (13,422) (5,897)
EBITDA 717,373 636,342 717,373 636,342
Depreciation of property, plant and equipment (69,244) (185,443) (69,244) (185,443)
Depreciation of right of use asset 2 (381,186) - (381,186) -
Finance costs - lease liabilities 2 (106,949) - (106,949) -
Finance income 13 13,293 7,484 13,293 7,484
Finance costs 13 (59,343) (112,206) (59,343) (112,206)
Foreign exchange gains 13 92,217 5,825 92,217 5,825
Fair value gain/(loss) on derivatives 8,145 (42,692) 8,145 (42,692)
Gain on partial disposal of investment in a former subsidiary 14 - 350,317 - 350,317
Remeasurement gain on retained interest in a former subsidiary 14 - 534,712 - 534,712
Profit before taxation 214,306 1,194,339 214,306 1,194,339
Tax expense 15 (3,862) (6,179) (3,862) (6,179)
Deferred taxation 15 (108,835) (97,819) (108,835) (97,819)
Net profit for the financial period 101,609 1,090,341 101,609 1,090,341
Attributable to:
- Owners of the company 96,089 1,141,985 96,089 1,141,985
- Non-controlling interests 5,520 (51,644) 5,520 (51,644)
101,609 1,090,341 101,609 1,090,341
Earnings per share attributable to owners of the Company (sen)
- Basic 2.9 34.2 2.9 34.2
- Diluted 2.9 34.2 2.9 34.2
* Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA")
Quarter ended Quarter ended Year ended Year ended
INDIVIDUAL QUARTER CUMULATIVE
Page 2
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
2
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
The condensed consolidated income statement and consolidated statement of comprehensive income should
be read in conjunction with the audited financial statements for the financial year ended 31 December 2018
and the accompanying explanatory notes attached to the interim financial statements.
Quarter ended Quarter ended Year ended Year ended
31/3/2019 31/3/2018 31/3/2019 31/3/2018
RM'000 RM'000 RM'000 RM'000
Net profit for the financial period 101,609 1,090,341 101,609 1,090,341
Other comprehensive income/(loss)
Remeasurement loss on employee benefits liability, net of tax (2,252) - (2,252) -
Fair value reserve 41,358 23,902 41,358 23,902
Cash flow hedges 517,118 (1,193) 517,118 (1,193)
Foreign currency translation differences 50,234 114,989 50,234 114,989
Total comprehensive income for the period 708,067 1,228,039 708,067 1,228,039
Total comprehensive income attributable to:
Owners of the Company 701,976 1,279,683 701,976 1,279,683
Non-controlling interests 6,091 (51,644) 6,091 (51,644)
708,067 1,228,039 708,067 1,228,039
INDIVIDUAL QUARTER CUMULATIVE
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AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
3
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
31/3/2019 31/12/2018
RM'000 RM'000
Note
NON CURRENT ASSETS
Property, plant and equipment 16 2,805,210 2,851,917
Right of use assets 23 9,791,878 -
Investment in associates 18 917,082 282,738
Investment in a jointly controlled entity 14 - 583,854
Investment securities 535,117 477,860
Intangible assets 617,597 615,413
Deferred tax assets 780,942 891,445
Receivables and prepayments 19 3,099,936 3,067,583
Deposits on aircraft purchase 628,660 578,002
Derivative financial instruments 23 387,270 383,111
19,563,692 9,731,923
CURRENT ASSETS
Inventories 109,248 106,326
Receivables and prepayments 19 1,540,099 1,394,970
Deposits on aircraft purchase 332,981 398,215
Amounts due from joint ventures - 6,792
Amounts due from associates 595,305 404,139
Amounts due from related parties 173,702 124,277
Derivative financial instruments 23 253,754 267,311
Tax recoverable 16,440 13,576
Deposits, bank and cash balances 2,943,967 3,326,921
Assets classified as held for sale 21 2,788,792 2,775,321
8,754,288 8,817,848
CURRENT LIABILITIES
Trade and other payables 20 2,494,888 2,680,025
Aircraft maintenance provisions 172,681 168,041
Sales in advance 1,190,428 1,128,447
Derivative financial instruments 23 102,500 465,277
Amounts due to associates 31,667 32,228
Amounts due to related parties 111,740 103,078
Amounts due to joint ventures - 11,032
Borrowings 22 638,245 423,163
Lease liabilities 22 1,796,440 -
Provision of taxation 12,328 4,741
Liabilities directly associated with assets held for sale 21 1,823,147 1,834,326
8,374,064 6,850,358
NET CURRENT ASSETS 380,224 1,967,490
AS AT AS AT
Page 4
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
4
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
TE
D ONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
The condensed consolidated statement of financial position should be read in conjunction with the audited
financial statements for the financial year ended 31 December 2018 and the accompanying explanatory
notes attached to the interim financial statements.
31/3/2019 31/12/2018
Note RM'000 RM'000
NON CURRENT LIABILITIES
Trade and other payables 20 3,528,906 3,513,909
Aircraft maintenance provisions 881,789 843,768
Amounts due to associates 47,278 45,436
Borrowings 22 520,660 781,966
Lease liabilities 22 8,091,054 -
Deferred tax liabilities 58,374 59,905
Derivative financial instruments 23 121,777 199,334
Provision for retirement benefits 67,323 69,830
13,317,161 5,514,148
6,626,755 6,185,265
CAPITAL AND RESERVES
Share capital 8,023,268 8,023,268
Merger deficit (5,507,594) (5,507,594)
Other Reserves 104,206 (451,447)
Foreign exchange reserve 228,749 178,515
Retained earnings 10 5,398,097 5,541,712
8,246,726 7,784,454
Non-controlling interests (1,619,971) (1,599,189)
Total equity 6,626,755 6,185,265
Net assets per share attributable to ordinary
equity holders of the Company (RM) 2.47 2.33
GROUP
AS AT AS AT
Page 5
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
5
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
The condensed consolidated statement of changes in equity should be read in conjunction with the audited financial statements for the financial year
ended 31 December 2018 and the accompanying explanatory notes attached to the interim financial statements.
Remeasure-
ment loss on
Foreign Cash flow employee Non-
Number Share Merger exchange hedge Fair value benefits Retained controlling Total
of shares Capital Reserve/(Deficit) reserve reserve reserve liability earnings Total interests equity
Note '000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
At 1 January 2019
As previously stated 3,341,974 8,023,268 (5,507,594) 178,515 (477,610) 21,716 4,447 5,541,712 7,784,454 (1,599,189) 6,185,265
Effects of changes in accounting policies 2 - - - - - - - (239,704) (239,704) (26,873) (266,577)
At 1 January 2019, as restated 3,341,974 8,023,268 (5,507,594) 178,515 (477,610) 21,716 4,447 5,302,008 7,544,750 (1,626,062) 5,918,688
Net profit for the financial period - - - - - - - 96,089 96,089 5,520 101,609
Other comprehensive income - - - 50,234 517,118 41,358 (2,823) - 605,887 571 606,458
At 31 March 2019 3,341,974 8,023,268 (5,507,594) 228,749 39,508 63,074 1,624 5,398,097 8,246,726 (1,619,971) 6,626,755
At 1 January 2018 3,341,974 8,023,268 (5,507,594) 196,050 (236,270) 169,353 (691) 5,393,218 8,037,334 (1,336,468) 6,700,866
Net profit for the year - - - - - - - 1,141,985 1,141,985 (51,644) 1,090,341
Other comprehensive income - - - 114,989 (1,193) 23,902 - - 137,698 - 137,698
At 31 March 2018 3,341,974 8,023,268 (5,507,594) 311,039 (237,463) 193,255 (691) 6,535,203 9,317,017 (1,388,112) 7,928,905
Attributable to owners of the Company
Page 6
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
6
UNAUDITED CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
31/3/2019 31/3/2018
RM'000 RM'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 214,306 1,194,339
Adjustments:
Property, plant and equipment
- Depreciation 69,244 185,443
- Gain on disposal (2,270) (33,832)
Depreciation of Right of Use asset 381,186 -
Amortisation of intangible assets 152 -
Write back of employee benefit expenses - (2,001)
Remeasurement gain on consolidation - (350,317)
Remeasurement gain on retained interest in a former subsidiary - (534,712)
Fair value (gain)/loss on derivative financial intruments (5,920) 42,692
Share of results of associates (31,053) (55,502)
Net unrealised foreign exchange (gain)/loss (73,100) (5,825)
Interest expense 59,343 112,206
Interest on lease liabilities 106,949 -
Interest income (13,293) (7,484)
705,544 545,007
Changes in working capital
Inventories (3,319) (5,714)
Receivables and prepayments (196,079) 46,163
Trade and other payables and provisions 50,328 (74,543)
Intercompany balances (236,359) (57,220)
Cash generated from operations 320,115 453,693
Interest paid (44,634) (80,687)
Interest received 13,269 (1,577)
Tax paid 206 -
Net cash generated from operating activities 288,956 371,429
PERIOD ENDED PERIOD ENDED
Page 7
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
7
UNAUDITED CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
The condensed consolidated cash flow statements should be read in conjunction with the audited financial
statements for the financial year ended 31 December 2018 and the accompanying explanatory notes
attached to the interim financial statements
31/3/2019 31/3/2018
RM'000 RM'000
CASH FLOWS FROM INVESTING ACTIVITIES
Property, plant and equipment
- Additions (37,739) (792,664)
- Proceeds from disposal 2,156 33,832
Additional deposits for aircraft (2,336) -
Additional investments in investment securities (15,899) -
Additional subscription of shares in associates - (103,477)
Proceeds from disposal of associates/ joint venture - 358,774
Net cash used in investing activities (53,818) (503,535)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of shares - 395
Proceeds from borrowings 111,224 710,922
Repayment of borrowings and lease liabilities (583,311) (408,698)
Net cash used in financing activities (472,087) 302,619
NET (DECREASE)/ INCREASE FOR THE FINANCIAL PERIOD (236,950) 170,513
CASH AND CASH EQUIVALENTS AT BEGINNING
OF THE FINANCIAL YEAR 3,326,921 1,882,195
CURRENCY TRANSLATION DIFFERENCES (146,004) (18,831)
CASH AND CASH EQUIVALENTS AT END OF
FINANCIAL PERIOD* 2,943,967 2,033,877
Net Cash Flow -
* Included within the balance at end of the financial period is an amount RM17.5 million restricted cash pledged as
securities for banking facilities
PERIOD ENDED PERIOD ENDED
Page 8
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
8
NOTES TO THE QUARTERLY REPORT
1. Basis of preparation
The Interim Financial Report is unaudited and has been prepared in accordance with paragraph
9.22 and Appendix 9B of Bursa Malaysia Securities Berhad’s (“Bursa Malaysia”) Listing
Requirements.
For the financial period under review, the Consolidated Income Statement has been presented to
better reflect the Airline and Non-Airline activities of the Group. The comparative Quarter and
Period to Date have been restated for comparison purposes.
The Interim Financial Statements should be read in conjunction with the audited financial
statements for the year ended 31 December 2018. The explanatory notes attached to the interim
financial statements provide an explanation of events and transactions that are significant forn
understanding of the changes in the financial position and performance of the Group since the year
ended 31 December 2018.
Page 9
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
9
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. Basis of preparation
The Consolidated Income Statement for the quarter ended 31 March 2019, in compliance with
MFRS134: Interim Financial Reporting is as follows:
The condensed consolidated cash flow statements should be read in conjunction with the audited financial statements for
the financial year ended 31 December 2018 and the accompanying explanatory notes attached to the interim financial
statements
31/3/2019 31/3/2018 31/3/2019 31/3/2018
RM'000 RM'000 RM'000 RM'000
Revenue 2,881,027 2,555,182 2,881,027 2,555,182
Operating expenses:
- Staff costs (445,314) (379,070) (445,314) (379,070)
- Depreciation of property, plant and equipment (450,430) (185,443) (450,430) (185,443)
- Aircraft fuel expenses (956,664) (852,457) (956,664) (852,457)
- Maintenance and overhaul (279,500) (170,590) (279,500) (170,590)
- User charges and other related expenses (419,520) (357,003) (419,520) (357,003)
- Aircraft operating lease expenses - (200,225) - (200,225)
- Other operating expenses (217,284) (145,352) (217,284) (145,352)
Other income 123,575 480,672 123,575 480,672
Operating profit 235,890 745,714 235,890 745,714
Finance income 13,293 7,484 13,293 7,484
Finance costs (166,292) (112,206) (166,292) (112,206)
Net operating profit 82,891 640,992 82,891 640,992
Share of results of associates 31,053 55,502 31,053 55,502
Foreign exchange gains 92,217 5,825 92,217 5,825
Fair value gain/(loss) on derivatives 8,145 (42,692) 8,145 (42,692)
Remeasurement gain on retained interest in a former subsidiary - 534,712 - 534,712
Profit before taxation 214,306 1,194,339 214,306 1,194,339
Tax expense (3,862) (6,179) (3,862) (6,179)
Deferred taxation (108,835) (97,819) (108,835) (97,819)
Net profit for the financial period 101,609 1,090,341 101,609 1,090,341
INDIVIDUAL QUARTER CUMULATIVE
Quarter ended Quarter ended Year ended Year ended
Page 10
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
10
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
2. Summary of significant accounting policies
The accounting policies and methods of computation adopted for the interim financial statements
are consistent with those adopted for the Audited Financial Statements for the financial year ended
31 December 2018. Details of standards, amendments to published standards and interpretations to
existing standards that are applicable to the Group with effect from 1 January 2019 or later are
provided in the notes to the financial statements in the Audited Financial Statements of the Group
for the financial year ended 31 December 2018. The Group did not early adopt any new standards,
amendments to published standards and interpretation to existing standards.
At the beginning of the current financial year, the Group and the Company adopted MFRS 16:
Leases. MFRS 16 will replace MFRS 117: Leases, IC Interpretation 4: Determining whether an
Arrangement contains a Lease, IC Interpretation 115: Operating Lease-Incentives and IC
Interpretation 127: Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
MFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of
leases and requires lessees to account for all leases under a single on-balance sheet model, similar
to the accounting for finance leases under MFRS 117. The Group has a number of operating leases
which are primarily for aircraft.
MFRS 16 has been adopted by the Group from 1 January 2019 using the modified retrospective
transition approach, which measures the lease liabilities based on the present value of future lease
payments calculated using the incremental borrowing rate and exchange rate at date of transition.
Lease payments would be split into principal and interest payments, using the effective interest
method.
Correspondingly, the right-of-use ("ROU") assets is based on the present value of the liability at
the commencement date of the lease, adding any directly attributable costs. The ROU asset will be
depreciated on a straight-line basis over the shorter of the lease term and the useful life of the leased
asset.
On the date of initial application, the Group applied the simplified transition approach and did not
restate comparative amounts for the period prior to first adoption.
Page 11
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
11
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
2. Summary of significant accounting policies (cont’d.)
The adoption of MFRS 16 has the following impact:
(a) To the opening balances as at 1 January 2019:
Audited
31/12/18
RM million
Adjustments
RM million
After MFRS
16 Adoption
RM million
Right of use asset - 9,429.9 9,429.9
Lease liabilities - (9,595.8) (9,595.8)
Investment in associates 282.7 (100.6) 182.1
Retained earnings 5,541.7 (239.7) 5,302.0
Minority interest (1,599.2) (26.8) (1,626.0)
(b) To the unaudited Consolidated Financial Statements for the period ending 31 March
2019:
(i) On the Consolidated Income Statement, expenses which were previously included
under aircraft operating leases will be replaced by finance costs – lease liabilities
and depreciation of right of use asset;
(ii) On the Consolidated Cash Flow Statement, operating lease rental outflows,
previously recorded within net cashflow from operating activities, are classified as
“net cashflow used in financing activities” for repayment of principal of lease
liabilities.
31/3/19 before
MFRS 16
RM million
MFRS 16
Adjustments
RM million
Unaudited
31/3/19
RM million
Depreciation (69,244) (381,186) (450,430)
Aircraft Operating Leases (449,870) 449,870 -
Finance expenses (59,343) (106,949) (166,292)
Net Operating Profit 121,156 (38,265) 82,891
Page 12
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
12
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
3. Auditors’ report on preceding annual financial statements
The auditors have expressed an unqualified opinion on the Group’s statutory financial statements
for the financial year ended 31 December 2018 in their report dated 5 April 2019.
4. Seasonality of operations
AirAsia is primarily involved in the provision of air transportation services and thus, is subject to
the seasonal demand for air travel.
5. Unusual items due to their nature, size or incidence
There were no unusual items affecting assets, liabilities, equity, net income or cash flows during
the current quarter and financial period-to-date.
6. Changes in composition of the Group
During the current quarter, the Group has incorporated the following subsidiaries:
a) On 6 March 2019, Asia Aviation Capital Limited (“AAC”), incorporated 4 wholly owned
subsidiaries at USD 1 (approximately RM4.09) each for owning, leasing and/ or financing of
aircraft:-
(i) Merah Aviation Asset Holding Two Limited;
(ii) Merah Aviation Asset Holding Three Limited;
(iii) Merah Aviation Asset Holding Four Limited; and
(iv) Merah Aviation Asset Holding Five Limited;
b) On 18 March 2019, the Group incorporated BIGLIFE Philippines Inc with 103,993 ordinary
shares to own, operate and develop AirAsia Big Loyalty program in Philippines.
c) On 19 March 2019, the Group incorporated BIGLIFE Japan Co Ltd with 1 ordinary shares to
own, operate and develop AirAsia Big Loyalty program in Japan.
d) On 21 May 2019, Red Beat Ventures Sdn Bhd (“RBV”), wholly owned subsidiary of the
Group, incorporated Teleport Everywhere Pte. Ltd (“Teleport”) with 100 ordinary shares at
USD100 to enable better organisation of Teleports subsidiaries, associates and investments
existing now and in the future.
During the current quarter, the Group, through its subsidiary, RBV completed the acquisition of
629,130 ordinary shares in Touristly Travel Sdn Bhd for a cash consideration of RM1.1 million.
Following the acquisition, Touristly Travel Sdn Bhd ceased to be a joint venture as the
shareholdings of the Group increased from 50% to 74.6%.
Page 13
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
13
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
7. Changes in estimates
There were no changes in estimates that have had a material effect on the results of the current
quarter and financial period-to-date.
8. Capital and reserves
There was no cancellation, repurchases, resale and repayment of debt and equity securities for the
period ended 31 March 2019.
9. Dividends paid and proposed
The second interim dividend for the financial year ended 31 December, 2018 of 12 sen per share
on 3,341,974,082 Ordinary Shares of the Company, amounting to RM401,036,890, was paid on 10
April 2019.
10. Retained earnings
Retained earnings of RM1,314,109, being the retained earnings of the Company, is available for
distribution to shareholders of the Company.
11. Revenue
Quarter ended
31/3/2019
RM million
Quarter ended
31/3/2018
RM million
Passenger revenue
- seat sales 2,094.6 1,823.1
- others 515.3 449.8
Aircraft operating lease income 170.2 238.0
2,780.1 2,510.9
Teleport (Logistics) * 100.9 44.3
2,881.0 2,555.2
* For the current quarter, freight services is centralised and undertaken by the Group through logistics business
provider, Teleport. Previously, freight services was handled by the respective AOCs.
Passenger revenue “Others” includes ancillary income such as administrative fees, baggage fees,
assigned seats, cancellations, documentation and other fees, and on-board sales of meals and
merchandise.
Page 14
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
14
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
12. Other income
Quarter ended
31/3/2019
RM million
Quarter ended
31/3/2018
RM million
Fees charged for provision of commercial air transport
services
34.8
33.7
Gain on disposal of property, plant and equipment 2.3 33.8
Charter income - 19.4
Others 43.7 32.9
80.8 119.8
Other income – Non airline 42.8 10.6
Gain on partial disposal of investment in a former
subsidiary
- 350.3
123.6 480.7
Other income “Others” includes commission and advertising income, forfeited revenue and
insurance claims.
13. Finance income/(costs) and foreign exchange gains/(losses)
Quarter
ended
Quarter
ended Year ended Year ended
31/3/19 31/3/18 31/3/19 31/3/18
RM million RM million RM million RM million
(a) Finance income
Interest income from:
- deposits with licensed banks 12.9 6.5 12.9 6.5
Discounting effect on financial instruments and others 0.4 1.0 0.4 1.0
13.3 7.5 13.3 7.5
(b) Finance costs
Bank borrowings (55.4) (107.0) (55.4) (107.0)
Amortisation of premiums for interest rate caps (0.8) (3.5) (0.8) (3.5)
Discounting effect on financial instruments, bank
facilities and other charges (3.1) (1.7) (3.1) (1.7)
(59.3) (112.2) (59.3) (112.2)
(c) Foreign exchange gains/(losses)
- realized 25.9 27.6 25.9 27.6
- unrealized 73.1 46.7 73.1 46.7
- fair value movement recycled
from cash flow hedge reserve
92.2 5.8 92.2 5.8
(6.8) (68.5) (6.8) (68.5)
Page 15
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
15
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
14. Remeasurement gain on retained interest in a former subsidiary
On 4 January 2018, the share swap agreement between Ground Team Red Holdings Sdn Bhd
(“GTRH”) and SATS Ltd. (“SATS”) was completed, wherein GTRH acquired 80% equity stake in
SATS Ground Services Singapore Pte. Ltd in exchange for an 11.4% equity stake in GTRH. On
14th February 2018, the Group further completed the sale and transfer of 38.6% interest in GTRH
to SATS for a consideration of SGD119.3 million.
The transaction above resulted in the Group recognizing GTRH as a joint venture in prior year. A
re-measurement gain of RM534.7 million had been recognized in the financial statements of the
Group arising from this deemed disposal in prior year.
Reclassification of investment in joint venture to investment in associate
On 1 January 2019, SATS recognized GTRH as a subsidiary on the basis of control of key activities
and consolidated the said entity in its financial statements. As the Group can now only exercise
significant influence, pursuant to the requirements of the accounting standards, the Group
reclassified the investment from “investments in joint venture” to “investments in associates”. This
reclassification does not have any financial impact to the consolidated income statement.
15. Income tax and Deferred tax
Income tax expense
The current taxation charge of RM3.9 million comprises tax payable on interest income and
corporate income taxes for the subsidiaries.
Deferred taxation Deferred tax liabilities of RM108.8 million was charged in the current financial period mainly due
to reversal of deferred tax asset on utilisation of unabsorbed capital allowances to offset profit
earned.
16. Property, plant and equipment
(a) acquisition and disposals
During the period ended 31 March 2019, the Group acquired property, plant and equipment
with a cost of RM37.7 million (period ended 31 March 2018: RM792.7 million).
During the period ended 31 March 2019, proceeds from disposal of property, plant and
equipment totaled RM2.2 million (period ended 31 March 2018: RM33.8 million).
Page 16
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
16
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
16. Property, plant and equipment (cont.d)
(b) revaluation
There was no revaluation of property, plant and equipment in the quarter under review or
in the same quarter of the prior year.
(c) impairment
There was no impairment of property, plant and equipment in the quarter under review or
in the same quarter of the prior year.
17. Quoted investments and properties
There was no purchase or disposal of quoted securities for the quarter under review and financial
period to date.
18. Investments in associates
As at
31/3/2019
RM million
As at
31/12/2018
RM million
Investment at cost 672.2 672.2
Adjustment due to adoption of MFRS 16 (100.6) -
Reclassified from investment in joint venture 572.7 -
Share of results and reserves (227.2) (389.5)
917.1 282.7
For the quarter ended 31 March 2019, the Group, as permitted by MFRS 128, has not recognized
our share of losses relating to AirAsia India, where this share of losses exceeds the Group’s interest
in the associate. The unrecognized losses at the reporting date is RM236.5 million.
Page 17
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
17
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
19. Receivables and prepayments
As at
31/3/2019
RM million
As at
31/12/2018
RM million
Non-current
Prepayments 1,835.3 2,011.2
Deposits and other receivables 1,264.6 1,056.4
3,099.9 3,067.6
Current
Trade and other receivables 537.8 485.9
Prepayments 985.7 829.9
Deposits 16.6 79.2
1,540.1 1,395.0
Prepayments include advances for the purchase of fuel as well as prepaid engine maintenance costs
to the service provider.
20. Trade and other payables
As at
31/3/2019
RM million
As at
31/12/2018
RM million Non-current
Other payables 1,443.3 1,428.3
Aircraft maintenance payables 2,085.6 2,085.6
3,528.9 3,513.9
Current
Trade payables 365.6 538.2
Accruals for fuel 201.3 149.6
Collateral for derivatives 46.3 79.4
Aircraft maintenance payables 315.5 315.5
Others 1,566.2 1,597.3
2,494.9 2,680.0
Other payables and accruals include accruals for operational expenses, passenger service charges
payable to airport authorities and security deposits for leased aircraft. Aircraft maintenance
payables are maintenance costs that will be incurred on the return of leased aircrafts.
Page 18
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
18
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
21. Assets classified as held for sale and liabilities associated with assets held for sale
On 24 December 2018, an indirect subsidiary of the Group, Asia Aviation Capital Limited
(“AACL”) entered into a Sale and Purchase Agreement with AS Air Lease Holdings 5T DAC and
AS Air Lease 8 (Offshore) LP, both entities controlled by Castlelake L.P for the disposal of Merah
Aviation Asset Holding Limited, Merah Aviation Asset Holdings Two Limited, Merah Aviation
Holdings Three Limited, Merah Aviation Asset Holding Four Limited and Merah Aviation Asset
Holding Five Limited, which collectively own twenty five (25) aircrafts to be leased to AirAsia
Berhad, for an aggregate consideration of USD768 million (approximately RM3,216.4 million).
As such, these aircraft assets have been reclassified to current assets in accordance with MFRS 5
Non-current Assets Held for Sale and Discontinued Operations. Correspondingly, the depreciation
on those assets have ceased and aircraft liabilities have also been reclassified to current liabilities.
22. Borrowings and lease liabilities
As at
31/3/2019
RM million
As at
31/12/2018
RM million Short term
Term loans 541.9 325.4
Finance lease liabilities 54.6 58.3
Lease liabilities - MFRS 16 1,796.4 -
Commodity Murabahah Finance 19.1 22.2
Revolving credit 22.6 17.3
2,434.6 423.2
Long term
Term loans 283.8 530.1
Finance lease liabilities 169.5 178.5
Lease liabilities – MFRS 16 8,091.1 -
Commodity Murabahah Finance 67.4 73.3
8,611.8 781.9
Total 11,046.4 1,205.1
Page 19
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
19
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
22. Borrowings and lease liabilities (cont’d)
The currency profile of borrowings and lease liabilities is
as follows:
As at
31/3/2019
RM million
As at
31/12/2018
RM million
Ringgit Malaysia 86.4 95.5
US Dollar 10,757.5 885.6
Euro 55.5 56.1
Philippine Peso 93.0 94.5
Indonesian Rupiah 54.0 73.4
11,046.4 1,205.1
Total borrowings include secured liabilities of the Group of RM2.9 billion. These are secured by
the following:
(a) Assignment of rights under contract with Airbus over each aircraft;
(b) Assignment of insurance of each aircraft; and
(c) Assignment of airframe and engine warranties of each aircraft.
The term loans, finance lease liabilities (Ijarah) and commodity murabahah finance are for the
purchase of aircraft, spare engines and working capital. The repayment terms of term loans and
finance lease liabilities (Ijarah) and commodity murabahah finance are on a quarterly or semi-
annual basis.
The Group has adopted MFRS 16: Leases beginning 1 January 2019. The Lease liabilities indicated
above is supported by corresponding Right of Use Asset of RM9,791.9 million. The Lease
liabilities repayment is on a monthly basis based on the operating lease agreement.
The maturity period of non-current borrowing is 11 years and below. The Group has substantially
hedged its foreign exchange exposure through foreign exchange contracts as explained in Note 23
(a).
Page 20
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
20
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
23. Derivative financial instruments
(a) Forward Foreign Exchange Contracts
As at 31 March 2019, the Group has entered into Cross-Currency Swaps and Foreign
Currency Swaps to hedge the USD dollar liabilities of its aircraft into Malaysian Ringgit
(“MYR”).
(b) Interest Rate Hedging
As at 31 March 2019, the Group has entered into interest rate hedging transactions to hedge
against fluctuations in the US$ Libor on its existing aircraft financing.
(c) Fuel Hedging
As at 31 March 2019, the Group has entered into swaps and options for both Brent and
Crack, which represent up to 52% of the Group’s total budgeted fuel consumption for 2019.
For the years 2020 and 2021, the swaps represents up to 40% and 4% of the Group’s total
budgeted fuel consumption respectively.
Type of Derivatives
Notional Value
Fair value
31/3/2019
Assets/(Liabilities)
Barrels million RM million
Fuel contract - less than 1 year 5.6 23.7
- 1 year to 3 years 4.7 18.4
Total 10.3 42.1
Interest rate contracts RM million RM million - less than 1 year 291.8 (1.5)
- 1 year to 3 years 373.0 (7.6)
- More than 3 years 1,420.0 (28.3)
Total 2,084.8 (37.4)
Foreign currency contracts RM million RM million - less than 1 year 260.2 55.9
- 1 year to 3 years 430.5 92.5
- More than 3 years 638.7 136.4
Total 1,329.4 284.8
The related accounting policies, cash requirements of the derivatives, risks associated with the
derivatives and policies to mitigate those risks are unchanged since the last financial year.
Page 21
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
21
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
24. Status of corporate proposals announced
Proposed sales and leaseback for twenty five (25) aircraft to CastleLake L.P
As disclosed in Note 21, the current proposal was approved by the shareholders in an Extraordinary
General Meeting held on 17th April 2019.
On 14th May 2019, AACL completed the disposal of its entire equity interest in Merah Aviation
Asset Holding Limited, which holds five (5) aircraft assets and received gross proceeds of USD87.6
million
Proposed joint venture in Vietnam
On 17th April 2019, AirAsia Investment Limited, a wholly-owned subsidiary of the Company,
together with Gumin Company and Hai Au Aviation Joint Stock Company, have amicably agreed
to terminate and release each other from all obligations under the transaction agreements in relation
to the proposed joint venture in Vietnam.
25. Post balance sheet events
There are no post balance sheet events to be reported.
26. Contingent assets
As at the date of this report, the Group does not have any contingent assets.
27. Changes in contingent liabilities since the last annual balance sheet date
There were no material changes in contingent liabilities since the audited financial statements of
the Group for the financial year ended 31 December 2018.
28. Capital commitments outstanding not provided for in the interim financial report
Capital commitments for property, plant and equipment:
As at
31/3/2019
RM million
As at
31/12/2018
RM million
Approved and contracted for 114,528.9 88,640.5
Approved but not contracted for 49.3 26.4
114,578.2 88,666.9
Page 22
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
22
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
29. Material related party transactions
Significant related party transactions which were entered into on agreed terms and conditions for
the quarter ended 31 March 2019 are set out below:
Quarter ended
31/3/2019
RM million
Quarter ended
31/3/2018
RM million 1. Transaction of the Group with associates of a
subsidiary
a. Lease rental income on aircraft
- Thai AirAsia 66.6 119.5
- India AirAsia 21.5 46.3
- Japan AirAsia 10.0 7.6
2. Transaction of the Group with company with
common directors and shareholders
a. Lease rental income on aircraft
- PT Indonesia AirAsia Extra 17.1 16.3
b. Wet lease expenses on aircraft
- PT Indonesia AirAsia Extra 26.1 -
c. Purchase of cargo transportation capacity
- AirAsia X Berhad
42.7
-
Page 23
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
23
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
30. Review of Group Performance
Consolidated Group Performance
The Group Revenue for the current quarter recorded a Net Profit Before Tax (“NPBT”) of RM214.3
million. The Q1 2019 NPBT, which includes a RM92 million foreign exchange gain is 82% lower
than the corresponding quarter’s NPBT of RM1,194.3 million, which included a gain on a partial
disposal of a subsidiary of RM350.3 million and a remeasurement gain on the retained interest in
a former subsidiary of RM534.7 million. The current quarter’s NPBT has been impacted by an
additional charge of RM38.2 million on the adoption of MFRS 16.
Airline
Performance indicators
Exchange Rate: RM:USD – 4.081 - Prior year US cent and dollar are restated at current average exchange rate during
the quarter and year to date for ease of reference
Average Fuel Price/ Barrel restated using current average exchange rate for comparison is US$79/barrel
@ Capacity 2018 exclude capacity for IAAX aircrafts that was transferred to IAA in 4Q2018.
# Statistics exclude Logistic and Leasing operations
Passengers Carried 12,548,460 10,654,194 18%
Capacity 14,268,918 12,204,348 17%
Seat Load Factor 88% 87% 1
RPK (million) 15,678 13,815 13%
ASK (million) 17,788 15,979 11%
Average Fare (RM) 167 171 -3%
Unit Passenger Revenue (RM) 212 218 -3%
Revenue / ASK (sen) 15.10 14.68 3%
Revenue / ASK (US cents) 3.70 3.60 3%
Cost / ASK (sen) 14.57 13.55 8%
Cost / ASK (US cents) 3.57 3.32 8%
Cost / ASK-ex Fuel (sen) 9.14 8.22 11%
Cost / ASK-ex Fuel (US cents) 2.24 2.01 11%
Aircraft (end of period) 141 123 15%
Average Stage Length (km) 1,239 1,290 -4%
Number of Flights 78,709 67,566 16%
Fuel Consumed (Barrels) 2,851,983 2,632,112 8%
Average Fuel Price (US$ / Barrel) 83 83 0%
Change % Jan -Mac 2019 Jan - Mac 2018
Page 24
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
24
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
30. Review of Group Performance - Airline (cont’d.)
During the quarter, Total Group Revenue grew 9%, from RM 2,555.1 million recorded in 1Q18 to
RM2,780.1 million in 1Q19. The growth was attributed to an 18% increase in total passengers
carried and increase in Load Factor from 87% to 88%. However, Overall Unit Passenger Revenue
decreased by 3% from RM218 to RM212.
In line with the growth in revenue, 1Q19 reported EBITDA of RM678.4 million as compared to
EBITDA of RM642.9 million for 1Q18, an increase of 6%. The growth in revenue was offset by
the increase of staff costs and user charges and related expenses in line with the increase in Capacity
of 17%, incurring more operations staff costs, route charges and landing charges. Maintenance and
overhaul also increased by 64% as higher provision for engine overhaul was made as a result of
higher number of leased aircraft on the completion of sales and leaseback transaction in 4Q18.
Following the adoption of MFRS 16: Leases, aircraft operating lease expenses were no longer
recognized as part of the income statement but as a reduction of lease liabilities. The aircraft
operating lease expense were replaced by recognition of depreciation and interest as explained in
Note 2.
Cashflow commentary for current quarter against corresponding quarter
Net Cash Flow
Period ended
31/3/2019
RM million
Period ended
31/3/2018
RM million
Cash from Operating activities 289.0 371.4
Cash from/(to) Investing activities (53.8) (503.5)
Cash from/(to) Financing activities (472.1) 302.6
(236.9) 170.5
The Group’s cash inflow from operations was RM289.0 million, compared to inflow of RM371.4
million in the same quarter last year. The net cash outflow for the period ended 31 March 2019
amounted to RM236.9 million, mainly due to proceeds payment of operating lease of aircraft.
The net gearing ratio as at 31 March 2019 and 31 December 2018 are as follows:
As at
31/3/2019
RM million
As at
31/12/2018
RM million Borrowings and lease liabilities (current and non current) 11,046.4 1,205.1
Liabilities directly associated to asset held for sale 1,823.1 1,834.3
Less: Deposit, cash and bank balances 2,943.9 3,326.9
Net Debt 9,925.6 Nil
Total equity 8,246.7 7,784.5
Net gearing ratio (times) 1.2 Nil
Page 25
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
25
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
30. Review of Group Performance - Airline (cont’d.)
Associate’s Performance
(a) Thai Air Asia Co. Ltd (“Thai AirAsia”)
Performance indicators
Exchange Rate: THB:USD – 31.68 - Prior year US cent and dollar are restated at current average exchange
rate for ease of reference
Average Fuel Price/ Barrel restated using current average exchange rate for comparison is US$93/barrel
# CASK with adjustments of MFRS16 is THB1.49
Jan - Mac Jan -Mac Jan - Mac
2019
Jan -Mac
2018
Passengers Carried 5,861,824 5,639,204 4%
Capacity 6,507,990 6,224,610 5%
Seat Load Factor 90% 91% -1
RPK (million) 6,151 5,618 9%
ASK (million) 6,874 6,245 10%
Average Fare (THB) 1,554 1,664 -7%
Unit Passenger Revenue (THB) 1,906 2,000 -5%
Revenue / ASK (THB) 1.62 1.80 -10%
Revenue / ASK (US cents) 5.11 5.68 -10%
Cost / ASK (THB) 1.54 1.54 0%
Cost / ASK (US cents) 4.85 4.86 0%
Cost / ASK-ex Fuel (THB) 1.00 0.99 1%
Cost / ASK-ex Fuel (US cents) 3.16 3.13 1%
Aircraft (end of period) 62 59 5%
Average Stage Length (km) 1,056 1,003 5%
Number of Flights 36,061 34,506 5%
Fuel Consumed (Barrels) 1,254,354 1,154,128 9%
Average Fuel Price (US$ / Barrel) 91 93 -2%
Change
%
Page 26
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
26
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
30. Review of Group Performance - Airline (cont’d.)
(a) Thai Air Asia Co. Ltd (“Thai AirAsia”)
Financial Statements
# After adjusting for MFRS 16, the Profit after tax for Thai Airasia is THB1,007.3 million
*EBITDAR – Earnings Before Interest, Depreciation, Amortisation and Rental
Thai AirAsia is an associate company owned 45% by AirAsia Berhad. As such it is
accounted for using the equity method, as permitted by the Malaysian Accounting
Standards Board MFRS128, Investments in Associates. Thai AirAsia have not adopted
MFRS 16: Leases but adjustments were made at the Group consolidated financial
statements to align the accounting policy to the Group.
Jan - Mac
2019
Jan -Mac
2018
THB'000 THB'000
Revenue 11,155,313 11,254,300
Operating expenses:
- Staff costs (1,604,628) (1,518,018)
- Aircraft fuel expenses (3,628,000) (3,384,474)
- Maintenance and overhaul (880,548) (748,782)
- User charges and other related expenses (1,328,871) (1,087,617)
- Other operating expenses (1,276,527) (1,168,411)
Other income 323,472 298,504
EBITDAR 2,760,211 3,645,502
Depreciation of property, plant and equipment (430,361) (402,101)
Aircraft operating lease expenses (1,344,606) (1,229,125)
Finance income 4,439 12,507
Finance costs (191,810) (170,946)
Foreign exchange gains 138,827 77,503
Profit before taxation 936,700 1,933,340
Deferred taxation (33,781) (98,732)
Profit after taxation 902,919 1,834,608
Page 27
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
27
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
30. Review of Group Performance - Airline (cont’d.)
(a) Thai Air Asia Co. Ltd (“Thai AirAsia”)
Financial Statements
Thai AirAsia recorded Total Revenue of THB11,155.3 million in 1Q19, 1% lower than
1Q18 of THB11,254.3 million. Whilst passengers carried increased by 4%, Load Factor is
down marginally to 90%. Average Fare and Unit Passenger Revenue decreased by 7% and
5%, respectively. However, when compared to 4Q18 which reported a Loss After Tax, the
1Q19 return to a report a Profit.
Thai AirAsia reported EBITDAR of THB2,760.2 million, against EBITDAR of
THB3,645.5 million in 1Q18, a decrease of 24% whilst PBT is at THB936.7 million
against 1Q18 PBT of THB1,933.3 million, a decrease of 52%. This is mainly attributable
to lower average fare despite the increase in passengers carried with RASK showing a
decrease of 10% from THB1.80 to THB1.62. The CASK remain constant as cost remain
well controlled.
Year Ended Mac 2019 Dec 2018
THB'000 THB'000
Property, plant and equipment 25,819,060 26,129,012
Intangible assets 24,518 26,991
Inventory 210,217 188,318
Aircraft maintenance reserve 5,457,828 4,532,741
Other debtors and prepayments 2,285,455 2,131,639
Amounts due from related parties - 872,217
Cash and Short term deposits 4,309,167 4,036,976
Total Assets 38,106,245 37,917,894
Sales in advance 4,603,708 4,986,935
Other creditors and accruals 3,962,801 3,593,021
Amount due to related parties 52,534 699,190
Borrowings 8,028,581 7,583,055
Lease liabilities 12,774,837 13,219,322
Deferred tax liabilities 136,333 58,303
Total Liabilities 29,558,794 30,139,826
Share capital 435,555 435,555
Retained earnings 8,111,896 7,342,513
Total Equity 8,547,451 7,778,068
Page 28
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
28
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
30. Review of Group Performance - Airline (cont’d.)
(b) AirAsia (India) Limited (“AirAsia India”)
Performance indicators
Exchange Rate: RM:USD – 70.36- Prior year US cent and dollar are restated at current average exchange rate
during the quarter and year to date for ease of reference
Average Fuel Price/ Barrel restated using current average exchange rate for comparison is US$107/barrel
Jan -Mac Jan -Mac
2018
Passengers Carried 1,936,888 1,468,931 32%
Capacity 2,173,680 1,769,220 23%
Seat Load Factor 89% 83% 6
RPK (million) 2,093 1,497 40%
ASK (million) 2,322 1,770 31%
Average Fare (INR) 2,978 3,057 -3%
Unit Passenger Revenue (INR) 3,384 3,431 -1%
Revenue / ASK (INR cents) 271.93 273.08 0%
Revenue / ASK (US cents) 3.86 3.88 0%
Cost / ASK (INR cents) 337.85 327.91 3%
Cost / ASK (US cents) 4.80 4.66 3%
Cost / ASK-ex Fuel (INR cents) 207.73 190.72 9%
Cost / ASK-ex Fuel (US cents) 2.95 2.71 9%
Aircraft (end of period) 20 16 25%
Average Stage Length (km) 1,068 1,000 7%
Number of Flights 12,076 9,829 23%
Fuel Consumed (Barrels) 419,346 321,757 30%
Average Fuel Price (US$ / Barrel) 102 117 -12%
Change
%
Jan - Mac
2019
Page 29
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
29
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
30. Review of Group Performance - Airline (cont’d.)
(b) AirAsia (India) Limited (“AirAsia India”)
Financial Statements
AirAsia India is an associate company which is incorporated in India and is 49% owned
by AirAsia Berhad. As such it is accounted for using the equity method, as permitted by
the Malaysian Accounting Standards Board MFRS128, Investments in Associates.
Jan - Mac
2019
Jan -Mac
2018
INR'000 INR'000
Revenue 6,314,381 4,832,475
Operating expenses:
- Staff costs (1,061,212) (826,099)
- Aircraft fuel expenses (3,021,403) (2,427,846)
- Maintenance and overhaul (1,145,226) (711,360)
- User charges and other related expenses (1,032,537) (817,669)
- Aircraft operating lease expenses - (819,348)
- Other operating expenses (273,462) (314,734)
Other income 240,474 152,761
EBITDA 21,015 (931,821)
Depreciation of property, plant and equipment (1,093,064) (34,790)
Finance income 15,723 2,568
Finance costs (474,150) (6,400)
Foreign exchange gains/(loss) 62,564 (3,826)
Loss before tax (1,467,912) (974,268)
Deferred taxation - -
Loss after tax (1,467,912) (974,268)
Page 30
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
30
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
30. Review of Group Performance - Airline (cont’d.)
(b) AirAsia (India) Limited (“AirAsia India”)
Financial Statements
AirAsia India recorded Total Revenue of INR6,314.4 million in 1Q19, 31% higher than
INR4,832.5 million in 1Q18. The increase in revenue was mainly due to a 32% increase
in number of passengers carried. Average Fare and Unit Passenger Revenue decreased by
3% and 1% respectively whilst Load Factor increased to 89% for 1Q19.
AirAsia India reported a positive EBITDA of INR21.0 million compared to negative
EBITDA of INR931.8 million in 1Q18. However, Loss before tax widens to INR1,467.9
million compared to INR974.3 million in 1Q18. This was mainly attributable to the
increase in Depreciation and Finance Expenses in line with the adoption of MFRS 16. The
increase in operating leases which resulted in the increase in depreciation and finance
expenses is in line with the increase in aircraft in AirAsia India.
Year Ended Mac 2019 Dec 2018
INR'000 INR'000
Property, plant and equipment 14,865,010 819,922
Inventory 221,974 202,784
Other debtors and prepayments 2,330,855 2,017,172
Amounts due from related parties 3,308,443 3,448,262
Cash and Short term deposits 1,025,403 986,740
Total Assets 21,751,685 7,474,880
Sales in advance 1,394,867 1,348,673
Other creditors and accruals 5,949,142 4,735,878
Amount due to related parties 6,875,394 6,399,077
Long term liabilities 15,778,414 1,121,216
Total Liabilities 29,997,817 13,604,844
Share capital 5,337,000 5,337,000
Retained earnings (13,583,132) (11,466,964)
Total Equity (8,246,132) (6,129,964)
Page 31
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
31
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
30. Review of Group Performance - Airline (cont’d.)
(c) AirAsia Japan Co. Ltd (“AirAsia Japan”)
AirAsia Japan is an associate company which is incorporated in Japan. The Group’s equity
interest in AirAsia Japan is 66.91%.
AirAsia Japan recorded a Net loss of JPY1,262.5 million. AirAsia Japan has not adopted
MFRS 16: Leases. The adoption of MFRS16 did not result in a material impact to income
statement of AirAsia Japan.
Non-Airline
The EBITDA for Non Airline businesses are as follows:
31. Variation of results against preceding quarter
The Group recorded a Net Profit of RM101.6 million for the quarter under review as compared to
a net loss of RM457 million in the immediately preceding quarter ended 31 December 2018.
32. Profit forecast
No profit forecast has been issued.
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Revenue 100,891 3,174 39,522 - 3,353 7,249
Operating expenses
- Staff Costs (3,558) (1,260) (12,293) - (564) (7,354)
- Other Operating Expenses (45,528) (1,357) (40,652) - (3,402) (5,792)
EBITDA 51,805 557 (13,423) - (613) (5,897)
RedBeat
Ventures
Group
AirAsia.com
RedBeat
Ventures
Group
AirAsia.com
Quarter ended 31/3/2019
Teleport
(Logistics)
Quarter ended 31/3/2018
Teleport
(Logistics)
Page 32
AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
32
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
33. Commentary on prospects
For the airline business, load factors for the rest of 2019 are showing strong momentum. Fares are
holding steady with 1Q19 trends. Our strategy remains to gain dominance in the countries we
operate in, especially within the ASEAN region. This year, we have planned for a net fleet growth
of 18 aircraft across our AOCs. A substantial number of aircraft is bound for AirAsia India, as we
expect to see some changes in India’s operating landscape in the near future, on top of our target to
fly international by the end of this year. We are also looking to add 2 aircraft in Indonesia to further
develop domestic tourism, aided by our strong international presence through our hub strategy,
including the recently launched Lombok hub
We have not seen any material negative impact from trade wars. However, currency weakness
remains a concern to the Group. To minimise fuel price volatility, we have hedged 52%-57% of
our fuel requirement for 2Q-4Q19 at average Brent hedge prices of US$61-64/bbl.
The Group will continue its focus on its transformation into a travel and financial platform. Teleport
(logistics business) is expected to see encouraging growth as we continue to seek tie ups with
different airlines, as well as SMEs. Teleport aims to launch teleport.social, a social commerce
enabler, in 2019. AirAsia.com is being developed as a full-fledged one-stop travel and lifestyle
platform whilst BigPay will be rolled out in multiple markets in ASEAN with the target to get a e-
money license in Singapore in 2019.
Barring any unforeseen circumstances, the Board remains positive that the overall core results of
the Group in 2019 will be better than 2018.
34. Material Litigation
As at 29 May 2019, there was no material litigation against the Group.
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AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
33
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
35. Other matters
In prior year, AriAsia Berhad, a wholly owned subsidiary of the Company, received a Writ of
Summons and Statement of Claim (“Claim”) dated 10 December 2018 and 31 January 2019, filed
at the High Court of Malaya at Kuala Lumpur from Messrs Skrine, solicitors acting for Malaysia
Airports (Sepang) Sdn Bhd (“MASSB”).
MASSB is claiming approximately RM14 million in relation to additional PSC for which AAB
was required to collect additional RM23 per passenger, effective since 1 July 2018.
On 23 January 2019, AAB filed a statement of defence in which it contended that the claims are
made without justification and are unreasonable and that the claim by MASSB is misconceived,
invalid and/or premature as MASSB has not complied with and/or availed itself of the statutory
provisions for dispute resolution. Accordingly, AAB has filed an application to strike out the suit
on the above grounds.
On 14 May 2019, AAB filed a Judicial Review application to compel MAVCOM who had decline
to decide on the above dispute, to adjudicate the disputes between AAB and MASSB which was
provided under the MAVCOM Act.
36. Earnings per share
Basic earnings per share is calculated by dividing the net profit attributable to owners of the
Company for the financial period by the weighted average number of ordinary shares in issue
during the financial period.
INDIVIDUAL
QUARTER
CUMULATIVE
Quarter
ended
31/3/2019
Quarter
ended
31/3/2018
Year
ended
31/3/2019
Year
ended
31/3/2018
Net profit attributable to owners of
the Company (RM’000)
96,089
1,141,985
96,089
1,141,985
Weighted average number of
ordinary shares in issue (‘000)
3,341,974
3,341,974
3,341,974
3,341,974
Basic and diluted earnings per share
(sen)
2.9
34.2
2.9
34.2
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AIRASIA GROUP BERHAD
(Company No. 1244493-V)
FIRST QUARTER REPORT ENDED 31 MARCH 2019
34
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
36. Earnings per share (cont’d.)
The Group does not have in issue any financial instruments on other contracts that may entitle its
holder to ordinary shares and therefore, dilutive to its basic earnings per share.
37. Authorisation for issue
The interim financial statements were authorised for issue by the Board of Directors.
By order of the Board
JASMINDAR KAUR a/p SARBAN SINGH
(MAICSA 7002687)
COMPANY SECRETARY
29 May 2019